Ledes from the Land of Enchantment

Emergency loans for fire victims approved months ago yet to be delivered. Also, no one has applied.

It’s been more than two months since the governor authorized sending emergency loans to northern New Mexico fire victims. Nobody’s gotten any money yet since the state has received no applications, according to public records released by the state agency responsible for distributing up to $100 million in funds.

First, state officials needed to get money and then set up an application process. In the month since that’s been set up now, zero applicants have filed for a loan.

Lawmakers quickly passed Senate Bill 6 through the legislative session, and Gov. Michelle Lujan Grisham signed it on Feb. 20. It allows the state to send $100 million in zero-interest loans to political subdivisions in and around the Hermits Peak-Calf Canyon Fire burn scar.

The legislation has an emergency clause, meaning money should be available immediately. The goal was to get funds for repair projects faster than the federal government. Last year, Congress approved billions of dollars in relief to pay for damage caused by the disaster first started by the U.S. Forest Service.

After Lujan Grisham signed the bill, it took nearly a month for funds to be delivered to the Department of Finance and Administration. The department got and budgeted the dollars by March 23.

State officials finalized the application for the loans a week later, on March 30.

Source NM verified this information through public records obtained through the New Mexico Department of Finance and Administration.

The Department of Finance and Administration as well as the Department of Homeland Security and Emergency Management explained how to apply for loans to eligible entities in late March and April.

Northern NM officials may wait months for federal approval before getting state disaster loans

Henry Valdez, spokesperson with state agencies trying to connect loans to communities, said via email that there are at least seven political subdivisions eligible for these loans: Mora County, San Miguel County, the City of Las Vegas, New Mexico Highlands University, La Acequia del Cañoncito, La Acequia del Cañoncito del la Cueva and the Agua Pura Mutual Domestic Consumers Water Association.

For five of those entities — Mora County, San Miguel County, the City of Las Vegas, La Acequia del Cañoncito and the Agua Pura Water Association — necessary repair dollars for some projects added up to over $34 million in late March, according to public records.

That’s over a third of the state loans that are available.

And the applicant list will likely keep growing. More acequia associations will probably be eligible in the future, if not already, according to emails released by the state.

Questions stand if there will be enough loan money to go around.

Since entities haven’t applied for the state loans yet, the Department of Finance and Administration hasn’t given out any money. Valdez said the dollars will be delivered once the political subdivisions start applying.

“The funds are ready to be disbursed,” he said. “Once the political subdivisions submit their applications, we’ll get this money out the door for these projects to help the communities recover.”

Meanwhile, FEMA has fulfilled only $5.7 million so far between Mora and San Miguel Counties, according to a FEMA spokesperson.

Confusion around who can get the loans

Senate Bill 6 specified that loans are only available for political subdivisions in New Mexico, such as local governments or acequia associations.

State officials didn’t seem completely sure if private nonprofits could get the loans too.  

One such nonprofit, the Mora-San Miguel Electric Cooperative, serves over 11,000 people in northern New Mexico. The fire left many without cell service as the disaster knocked out towers. Lack of electricity is still an issue for some, according to residents in the area.

The electrical company took significant damage from the fire and qualified for more than $21 million for repairs through FEMA’s public assistance program, according to state records.

That FEMA public assistance program is the same program that political subdivisions have to qualify for in order to get the state loans.

Potential loopholes

There could be some work-arounds for private nonprofit organizations.

David Lienemenn, spokesperson for DHSEM, said theoretically, a county could subcontract work to a nonprofit so funds could be delivered that way — just as long as the political subdivision is the one initially getting the loans from the state.

The difference is that private nonprofits like Mora-San Miguel Electric Cooperative can’t get those loans from the state.

The company has to wait for FEMA to get back to them, which could take a long time. That’s the reason the state wanted to set up its loan program in the first place.

Ali Rye is the deputy secretary of the New Mexico Department of Homeland Security and Emergency Management. She told a legislative House committee in February, before Senate Bill 6 was passed, that private nonprofits wouldn’t be eligible for state loans.

Rye said the same to Source NM in late March. However, she added that it’s better to say “there’s some back and forth” about the private nonprofits getting the loans rather than stating that they couldn’t get the state loans.

There also seemed to be confusion at the New Mexico Department of Finance and Administration about nonprofits’ eligibility.

FEMA opens claims offices to help compensate northern NM fire victims

In the initial drafts of the loan application, the Mora-San Miguel Electric Cooperative was listed as an eligible entity that could ask to borrow state money, according to the public emails obtained by Source NM.

Wayne Propst, cabinet secretary of the Department of Finance and Administration, told his staff and DHSEM staff on March 23 that the electric co-op “may” need to be removed based on a conversation earlier in the day.

The co-op got taken off the application in late March, just before the state explained to eligible officials how to apply for funds.

Eligible political subdivisions have until March 31, 2024 to apply for the state loans. Anyone approved has to enter a loan agreement with the state, and repay the dollars to the state’s General Fund once the federal money comes through.

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